The 'Conundrum' Explained

By

Roger C. Altman

Updated June 21, 2005 12:01 a.m. ET

In recent months, one overriding debate has raged within the world-wide financial community. How can long-term U.S. interest rates be so low? And how can so many economists have been so wrong on their interest rate forecasts? No less a figure than Alan Greenspan, chairman of the Federal Reserve Board, famously described this question as a "conundrum" in congressional testimony earlier this year.

It is stunning for the head of our central bank to describe himself as mystified by the behavior of overall rates. But...